In
today’s digital economy, personal data of consumers has become a rich
source of information and data for businesses seeking to address the
needs of their customers better, whether this is in the form of better
targeted advertising, or services tailored to the needs of particular
customers.

With the introduction of the Act, Malaysia recognises
that as the custodian of so much customer data, companies and
organisations also have a responsibility to their customers to ensure
that the information they hold is accurate, and adequately protected.

While
global multinationals have had a lot of experience in this area, due to
similar legislations in the United States and Europe, for many of the
local smaller enterprises in Malaysia, this is a new frontier.

With
the rapid adoption of IT technology to improve the customer experience,
through web portals or affinity and membership programmes, these
enterprises have also collected a lot of personal data of their
customers, and today share similar responsibilities under the Act.

Small and Medium Businesses (SMBs) are an important part of Malaysia’s economy as they constitute
99.2% of the total business establishments, contribute about 32% of
Gross Domestic Product (GDP) and 59% of total employment.

SMBs
are also a crucial part of the ecosystems as partners of multi-national
corporations (MNCs) as they do business in Malaysia.

However, it
is also increasingly apparent that MNCs see a risk in doing business
with partners who are not able to protect the sensitive data being
shared with them.

In 2011, 18% of all targeted cyber attacks
globally were on enterprises with 250 employees or less. In the first
half of this year, Symantec saw this percentage double to 36%.

Cybercriminals
recognise that because of the lower security posture of SMBs, they are
much easier targets, who would also have information (their own or
partners’ customer data, or Intellectual Property) which can be stolen and monetised.

In addition, compromised systems of SMBs are also used as stepping stones into the systems of their business partners.

It
is thus important that SMBs recognise the exposure they have to cyber
attacks, and the possible damage to their companies, through loss of
reputation, business, and even legal censure, in the case where
cybercriminals are able to steal data from inadequately protected
systems.

In the more than two years since the enactment of the
Act in Malaysia, the cybersecurity threat landscape has increased in
complexity and scale. News of large scale breaches of companies database
have been a constant and even the largest and best protected systems
have not been spared.

It is thus timely for the Government to also consider the introduction of mandatory breach notification within the Act.

This
would be in line with many other jurisdictions which have either
implemented such legislations or are in the process of doing so.

Mandatory
breach notification is an important part of any data protection
legislation as it gives a definitive course of action to companies of
what must be done in the case of a data breach.

By informing
affected stakeholders, this also gives them the opportunity to take the
required remedial actions (such as changing passwords, or having their
financial institutions change their credit card numbers) to mitigate the
consequences of the breach.

While it is recognised that this may
increase the regulatory overheads of the Act, and represent an
increased burden on companies, but the resulting improved consumer
confidence in the data protection regime as well as e-commerce can only
be helpful to Malaysia, as it moves towards developing its own digital
economy.

He
said the Act, which was passed by Parliament in 2010, plays a crucial
role in safeguarding the interest of individuals and makes it illegal
for corporate entities or individuals to sell personal information or
allow the use of data by third parties.

Many quarters, he said,
felt that the enactment of the Act was timely as it would facilitate the
transfer and transmitting of personal and often very important
information seamlessly.

"It gives the public more control over
their personal data. Whenever consent is required for data processing,
it'll have to be given expressly rather than impliedly or be assumed,"
he said in his keynote address at the Second Annual Personal Data
Protection Summit, here on Wednesday.

He said organisations would
need to embark on continuous data privacy audit exercises to ensure
compliance with the law as they now faced increased responsibility and
accountability in processing personal data disclosed to them.

Salang
said that to administer this piece of legislation, the Personal Data
Protection Department was established on May 16, 2011.

Under the Act, offenderscan be jailed for up to two years or fined RM300,000, or both, if convicted.

Salang urged the public to be careful about information they shared online, especially in social media applications.

"Unfortunately,
this is an 'open window' to our lives which makes it easier for those
with nefarious intent to obtain information and use it for their own
ends," he cautioned. - Bernama

Saturday, 29 December 2012

Global inflows into Asia, Window-dressing help push up Malaysianstock market

above: FBM KLCi Weekly chart (click to enlarge)

PETALING JAYA: The FTSE Bursa Malaysia KLCI Index (FBM KLCI) closed
at an all-time high of 1,681.33 points yesterday, courtesy of global
inflows into Asia and window dressing activities in local funds.

The
local benchmark index also recorded an intra-day high of 1,686.70
points. It closed 7.17 points, or 0.25%, higher to 1,681.33.

Total
turnover was 858.83 million shares valued at RM1.27bil. Gainers
outpaced losers 436 to 255 while 345 counters remained unchanged.

“The
market is behaving in a fairly predictable manner. According to past
patterns, the market should be sustainable until as late as the second
week of January,” said Interpacific Research head Pong Teng Siew.

He added that the market would most probably see a slight dip before it started rising again on a Chinese New Year rally.

“This
is a two-tiered market, with many of the biggest blue chips doing well.
However, it does not necessarily reflect a true representation of the
entire market,” Pong said.

Alliance Research analyst Teoh Chang
Yeow said although the FBM KLCI created a new record high of 1,686.70
points yesterday, the lack of follow-through buying interest saw it
easing slightly.

“This pushed the benchmark index down below the
1,680-point level to a day's low of 1,678.58 points before settling at
1,681.33 points,” he said in a report.

He expects FBM KLCI to
trade below 1,678.58 points on Dec 31, 2012, as analysis of the overall
daily market action on Friday suggested that buying power was weaker
than selling pressure.

On Friday, Asian markets were largely
unaffected by the looming fiscal cliff woes of the United States.
Instead, they paid more attention to the depreciating Japanese yen,
which is a result of possible further monetary easing. The Nikkei 225
Index gained 0.70% to 10,395.18 points on news of a huge injection
stimulus by the Bank of Japan.

Many people had expected the domestic front to
kick off the final week of 2012 on a soft platform, but surprisingly,
Bursa Malaysia was pretty upbeat, with the benchmark FBM Kuala Lumpur
Composite Index (FBM KLCI) opening up 3.97 points to 1,662.82.

Asian
equities steadied in quiet pre-Christmas trade, rebounding from huge
losses previously on optimism the fiscal cliff problem in the United
States would be resolved eventually. Taking the cue from a firmer
regional trend, some institutional funds continued to indulge in
year-end “window dressing” activity but interest was concentrated on
certain quality issues.

Elsewhere, second and lower liners were
mostly flat to lower on lack of retail participation. The apparent mixed
landscape and dull volumes were clearly displayed on the scoreboard.
Though the key index advanced a significant 10.55 points to 1,669.40 at
the settlement, losers outnumbered winners by 324 to 279, with only 620
million shares done on Monday.

Most bourses worldwide were closed
for Christmas. Major markets like Japan and China, which stayed open,
sustained the uptrend lifted by exporters' counters due to weaker yen.

In
spite of the bullish ambiance, the local bourse opened little changed,
up 0.1 point to 1,669.50 in an initial deals, pending a clearer picture
to emerge on Wednesday. The overall market sentiment was cautious, but
“window-dressing” activities were very much alive, although no evidence
of broad-based buying was sighted. But, as the key index crawled nearer
to the historical peak, some players opted to book profit and their
action somewhat capped the upside.

In range-bound session, the
FBM KLCI fluctuated between an intra-day high and low of 1,673.19 and
1,665.83 before finishing at 1,671.58, up 2.18 points in thin turnover.
Bargain hunters continued to dominate and rises in the blue chips lifted
the key index 2.58 points higher to 1,674.16 on Thursday and an extra
7.17 points to 1,681.33, off an early new all-time high of 1,686.70,
boosted by regional gains yesterday.

Statistics: For the
week, the principal index climbed 22.48 points, or 1.4% to 1,681.33
yesterday, compared with 1,658.85 at the close on Dec 21. Total turnover
for the four-day holiday week amounted to 2.920 billion shares worth
RM3.941bil, versus 3.875 billion units valued at RM6.57bil traded during
the regular previous week.

Technical indicators: Soon
after slipping below the 80% bullish line, the oscillator per cent K
reversed up quickly and climbed above the oscillator per cent D of the
daily slow-stochastic momentum index to trigger a short-term buy on
Thursday. Similarly, the 14-day relative strength index returned to the
bullish territory, ending at 78 points level yesterday.

Meanwhile,
the daily moving average convergence/divergence (MACD) histogram
sustained the upward thrust, in tandem with the daily trigger line to
retain the bullish note. Weekly indicators improved further, with the
weekly slow-stochastic momentum index strengthening and the weekly MACD
on the verge of calling a buy.

Outlook: The bulls bounced
back from the danger zone with a vengeance late last month to give Bursa
the fourth consecutive weekly gains. Based on the daily chart, the FBM
KLCI had penetrated the previous record of 1,679.37 to establish a new
all-time of 1,686.70 in early deals yesterday.

Apparently, the
major breakthrough was not accompanied by great volumes, but we were not
so concerned, as many big players were still on extended holidays.
Hence, no matter how you look, it is a bullish breakout and the most
important point is the bulls had somewhat removed the threat of a
“double-top” reversal.

With more investors returning to the
marketplace after the vacations and taking up fresh positions for the
new year ahead, they can expect the market to firm deeper into the
uncharted territory going forward.

Technically, indicators are
painting a promising pictogram, suggesting a steadier trend this week.
If there is an absolute change in the sentiment, the culprit would be a
breakdown in the budget talks, coming from the United States.

The
immediate upside is to challenge the 1,700 points psychological level.
Thereafter, resistance is expected at every 20 points or 30 points
intervals. Current support is pegged at the ascending 14-day and 21-day
simple moving averages, resting at the 1,659 points and 1,643 points
respectively.
---------------------------------------------------------------------------------

Test of 1,597.08 or a window-dressing decline?  FBM KLCI – May reverse near the key 1,597.08 all-time high.

Support: 1,562 to 1,581 Resistance: 1,596 to 1,597 Strategy:
The FBM KLCI gained 10.50 points to close at 1,596.33 last Friday. The
local market moved uneventfully until last Friday, when very
obvious low-volume 1Q window-dressing activities emerged. Volume
shrank from 1.94b to 1.25b shares last Friday.

above: FBM KLCi Weekly chart (click to enlarge)

The obvious areas for the FBM KLCI are in the 1,562 to 1,581 zone. The next resistance levels of 1,596 and 1,597 may see heavy liquidation activities. The FBM KLCI consolidated in a tight range of 801 to 936 from October 2008 to April 2009, but broke above
its resistance level of 936.63 (Wave a/B) in April 2009 and
surged to an all-time high of 1,597.08 on 11 July 2011. Its
intermediate Wave b/B low was 836.51. We traced out a Wave
c/B (of the Flat 3-3-5 variety) rebound phase to its all-time high
of 1,597.08 (c/B). A downward “killer” large-scale “Wave C” is now in
place and has only just begun, with a temporary low formed at 1,310.53
(Wave a/C). A temporary rebound wave (Wave b/C) is underway and may take
the shape of yet another Rising Wedge pattern (as shown on the chart
above).

If the index breaks the second upper Rising Wedge trend line, we would revise our Wave Count of an extended A-B-C correction to 1,310.53, and the current wave would be
an extended Fifth Wave of the major Flat correction from the
801.27 low. Trade cautiously, as the index may be peaking soon
with bearish divergent signals. We favour this second “overbought
scenario” for the index. A test of the 1,597.08-resistance (and all-time
high) could be met with heavy selling.

The year 2012 is coming to a close, leaving behind many problems. Most are man-made originating in politics.

Yet,
sadly, there are no major political leaders who have the credibility,
charisma and strength of character to garner the needed political
resolve to set their own nations or the world on the righteous path of
sustainable growth.

The re-election of US President Barack Obama
helped a little. As I write, even if he is able to persuade opposition
Republicans in Congress to a deal to avoid the looming “fiscal cliff”
(self-inflicted arrangement involving US$600bil of indiscriminate tax
hikes and “sequester” cuts in military and welfare spending, bringing on
a 3% reduction in 2013 fiscal deficit), the resulting cuts and taxes
will invariably become a drag on growth estimated by most to be at least
1% of gross doemstic product or GDP in 2013.

The downside risk
to global growth is likely to be exacerbated by the spread of the
ongoing austerity to most advanced nations. Thus far, the recessionary
fiscal drag has been centred on the eurozone periphery and United
Kingdom. Latest indicators point to it spreading to the eurozone's core
(including Germany and France) and Japan.

This only confirms the
International Monetary Fund (IMF)'s contention that excessive
front-loading of fiscal austerity will “dim global growth prospects in
2013.”

The recent near simultaneous leadership changes in China,
Japan and South Korea offer East Asia a fresh opportunity for
reconciliation after a period of tension.

The region's three
biggest economies now appear to be confidently over the hump following
the Tokyo and South Korean elections last week and Beijing's leadership
“jockeying” resolved by last month. But, realistically, they continue to
face headwinds from a stumbling world economy.

North Korea's rocket launch last week adds to regional uncertainty. So does continuing unrest in Syria and the Middle East.

Critical to the well-being of nations is how they will use this opportunity to get their ties back on track.

Enter 2013

The year 2013 is a big step following a tough year. To me, six events had dominated:

(i) Europe held the world's fate in its unsteady hands for most of the year. It took the European Central Bank (ECB)president Mario Draghi's
promise “to do whatever it takes to save the euro” to rid the sting out
of the crisis, with a later pledge of “unlimited” bond buying;

(ii) The impact of the war in Syria and Morsi's uneasy presidency in Egypt;

(iii)
Leadership transition in four of the world's five largest economies,
with “elections” in United States, France, Japan and China ushering
promises of new approaches to politics and policy making;

(iv) Serious political disputes in the East Asia seas;

(v) recent massive anti-Putin unrest in Russia; and

(vi) Serious transformation moves in Myanmar.

Today
they still continue to dominate. For the moment, it is too soon to tell
what their politics will bring in 2013. But one thing is for sure:
Global business gloom has deepened since the third quarter of 2012 and
is likely to persist.

I think there are some important lessons.

First,
investment risks have turned more political. US businesses today have
more than US$1 trillion in cash reserves and committed facilities
awaiting investment. For them, the nightmare is Washington staying
gridlocked, four days before falling off the “cliff.” Hopefully, like
before, the “game of chicken ends at the last minute.”

Second,
even a small economy like Greece (barely 2% of eurozone economy) can
have a material impact on global business sentiment as the “Grexit”
drama showed.

Third, the European episode pointed clearly that
governments can't cut and grow. One of the important takeaways from 2012
is that it is critical to always focus on the big picture and not be
grappled by event risks as these come and go.

As a US civil
rights activist once said: “For all its uncertainty, we cannot flee the
future.” So as we step into 2013, nations just have to embrace risks and
learn to manage and live with them. Scurrying away will not help.

OECD slashes forecast

Paris-based
rich nations' think-tank OECD (Organisation of Economic Co-operation
and Development) said in mid-December that its composite leading
indicators (CLIs) point to widely differing growth outlooks among its 34
member states.

Signs are of a modest pick-up in United States
and the United Kingdom, slowdown in Canada and Russia, and deepening
recession in the eurozone (including significant slackening in Germany
and France) and in Japan, and possibly Brazil.

OECD's CLIs are
designed to provide early signals of turning points between economic
expansion and slowdown, based on extensive data that have a reliable
history of signalling changes in activity.

Overall, barring worst
fears won't come to pass, combined OECD GDP will only rise 1%1.5% in
2013, not much change from 2012, with a modest pick-up to 2%2.5% in
2014.

Not unlike IMF's forecast, OECD growth will only expand if
eurozone deals seriously with its political and debt crisis, and the
United States finds a timely credible path to avoid the “cliff.”

Absent
such actions, world growth would slide into another downturn, with
deepening recession in the eurozone periphery, and contraction or
stagnation at the core and related advanced nations. What's needed is
“very careful policy steering”.

Eurozone manufacturing kept
contracting in November for a 16th month. Data show signs of recession
extending into 2013 as policymakers struggle to come to grips with the
crisis. For businesses and investors, the October Markit survey
concluded that in 2013 companies can expect challenging sales and
profits, causing many to focus on cost cutting.

Eurozone:
ECB slashed its forecast for the eurozone in 2013, signalling another
difficult year ahead. Echoing the IMF, it now expects growth of between
shrinking at 0.9% to a growth of 0.3% next year (minus 0.5% in 2012).

The
level of uncertainty was reflected in its first attempt to forecast
2014 at 1.2%. “Gradual recovery should start later in 2013” (GDP shrank
0.1% in the third quarter of 2012).

As the eurozone slipped into
recession for the second time in four years, Germany's growth slowed
down to 0.2% in the third quarter of 2012 (0.3% in the second quarter);
expectation is for it to expand 0.4% in 2013 (from 1.6% in 2012).
However, Germany faces a “favourable environment on the back of
expansionary monetary policy”. Expect some revival later on in the
second half of 2013, following better-than-expected jump in investor
sentiment in December.

Industrial output in Germany fell 2.4% in
October (minus 1.6% in September); France reported a 0.6% drop while
Spain and Portugal had increases of 1.2% and 4.8% respectively.

“France
is facing conditions much worse than Germany it's fast becoming aligned
with its southern neighbours of Spain and Italy.” Germany, given its
openness, cannot “prosper alone; it has a particular interest in the
welfare of its partners”.

Nevertheless, eurozone's peripheral
shows little sign of recovery: GDP continues to shrink because of fiscal
austerity, euro's excessive strength and severe credit crunch. Already,
social and political backlash against more austerity is becoming
overwhelming with strikes, riots, violence and rise of extremist
politics.

They just need growth. Another year of muddling through only revives old risks in a more virulent form in 2013 and beyond.

The United States:
Growth in United States remained anaemic at 1.5%2% for most of 2012.
Political and policy uncertainties abound. Fiscal worries are centred on
four key areas: taxes, spending, stimulus and borrowing.

The United States needs:

(i)
A package exceeding US$1 trillion in revenues over 10 years and set in
motion a tax reform process in 2013 to limit tax deductions and lower
rates for businesses and individuals;

(ii) A package of spending
cuts with less generous social benefits, health spending reductions and
cuts in selected mandatory programmes, including military;

(iii) Some short-term stimulus measures, especially on infrastructure projects and on education and R&D; and

(iv) Raising the debt ceiling now.

Already,
with continuing impasse even at this late hour, forecasters are
downgrading growth expectations for 2013. “It's a dangerous situation,”
says Nobel Laureate P. Krugman. “The opposition is lost and rudderless,
bitter & angry as it lashes out in the death throes of the
conservative dream.”

All this is happening at a time of significant game changes boosting the outlook:

(a) Housing is recovering;

(b) Manufacturing re-engineering is underway;

(c)
The third quarter 2012 growth is up 3.1% (1.3% in the seconbd quarter),
with consumer spending rising 1.6% and unemployment down to 7.7%, its
lowest since 2008;

(d) Pent-up demand is awaiting to be unleashed upon clarity on the future fiscal pathway; and

But
first, the daunting task to regain business and consumer confidence
needs to begin now. Because of continuing uncertainty, consensus
forecast chances of 24% for greater than 3% growth in 2013, same as
chances of a recession.

On the whole, they expect growth of 2.3%
in 2013, better than three months ago. But, this won't materially help
the 12 million jobless. Even by 2014, unemployment is unlikely to be
lower than 7%.

East Asia and Pacific (EAP): World Bank's
December update places growth in China and developing East Asia at 7.5%
in 2012 (against 8.3% in 2011) in the face of weak external demand.

Growth
in EAP is still the highest among the developing world and constituted
40% of global growth, but is set to recover to 7.9% in 2013.

EAP
(excluding China) will grow 5.6% in 2012, 1% higher than in 2011 due
mainly to a rebound of activity in Thailand, strong growth in the
Philippines, and relatively modest slowdown in Indonesia and Vietnam.
Malaysia held a steady course.

For the entire region, easy fiscal
and monetary policies supported growth. Next year, the region will
benefit from continued strong domestic demand and the mild expected
global recovery, especially in the second half of 2013.

I agree
with the World Bank that most EAP nations have retained strong
underlying macroeconomic fundamentals and should be better able to
withstand external shocks. But many risks remain, including open
vulnerabilities in the eurozone that could readily lead to renewed
financial market volatility, and global slowdown: The United States
falling off the “cliff” resulting in a loss of growth push for EAP;
potential hostility arising from political territorial tensions in the
Asian seas; and fallout from unexpected developments in Syria and the
Middle East.

However, the robust growth in services this year
reflects strong domestic support derived from continuing rising incomes.
As these trends gather strength, services can be expected to emerge as a
new growth driver in EAP.

For the region, latest business
sentiment surveys have turned positive for the fourth quarter of 2012,
reversing two consecutive quarters of declines, while global
uncertainties remained the biggest concern for the region's firms.

China
is expected to grow by 7%-9% in 2012 (9.3% in 2011), the lowest since
1999, due mainly to lower domestic demand growth reflecting the 2011
stabilisation measures. World Bank expects China to expand 8.4% in 2013
fuelled by fiscal stimulus and faster effective implementation of large
investment projects.

Indications are the recent slowdown has now
bottomed out: The third quarter 2012 GDP rose 7.4%, below the historical
trend and the lowest in 14 quarters, but its quarter-on-quarter growth
reached a 9.1% annual rate in the third quarter of 2012. Growth is,
however, expected to slacken to 8% in 2014 as productivity and labour
force growth tail off.

Consumer prices will likely continue to
fall, averaging 2.8% in 2012, but will rise moderately to 3.3% in 2013
as growth picks up and the lagged effects of easy monetary policies in
the second half of 2011 take hold.

China's policy challenge is to
balance the trade-off between supporting growth and reforming. But,
priority remains at implementing targeted tax cuts, health and social
welfare spending and large-scale social housing to support consumption.

What, then, are we to do?

Geopolitical
uncertainties will engulf 2013. Consumers, corporate and investors are
bound to remain cautious and risk adverse even scared.

But prospects in EAP look bright and the region continues to have ample fiscal space to counter the impact of external shocks.

Much
of the global uncertainties are still being generated in Europe. It's
messy there right now, but the recovery of Europe will come some day.

Today,
the ratio of stock market value to GDP averaged worldwide at 80%. In
peripheral Europe, this ratio ranged from 23% in Greece to 38% in
Portugal akin to where Asian counterparts were in 1998. Italy's total
stock market value is today about the same as Apple's.

R. Sharma of Morgan Stanley made these and other insightful comments in the Financial Times, with this refrain: Is Italy worth no more than Apple? Food for thought.

Look at it this way. We all have to keep the perspective in approaching 2013 in order to avoid our own self-made “cliff.”

WHAT ARE WE TO DOBY TAN SRI LIN SEE-YAN

● Former
banker, Dr Lin is a Harvard educated economist and a British Chartered
Scientist who speaks, writes and consults on economic and financial
issues. Feedback is most welcome; email: starbiz@thestar.com.my.

Friday, 28 December 2012

< Chan:
Whenever we attend an event, there is live tweeting, live blogging,
Facebook updates and we ask questions that our readers pose to us.

DO YOU remember Doogie Howser, MD, an American television comedy-drama starring Neil Patrick Harris as a teenage doctor?

If
you were a child in the 1980s, you could not have missed it. Howser
kept a diary on his computer and the episodes ended with him making an
entry in the diary. That was possibly our first introduction to what is
now known as web log or blog.

According to Merriam Webster’s
Dictionary a blog is a website that contains an online personal journal
with reflections, comments, and often hyperlinks provided by the writer.

Blogs
have become tremendously popular among Malaysians as they look for an
alternative source of information to supplement what is being reported
in mainstream media.

By the end of last year, marketing research
company NM Incite tracked over 181 million blogs around the world, up
from 36 million only five years earlier in 2006.

So how big is
blogging? NM Incite says three out of the top 10 social networking sites
in the United States — Blogger, WordPress and Tumblr — are for
consumer-generated blogs.

Blogger is the largest of these sites
with more than 46 million unique US visitors during October 2011, making
it second only to Facebook in the social networking category, and
Tumblr was the fastest-growing social networking or blog site on the top
10, more than doubling its audience since last year from home and work
computers to 14 million unique visitors.

Overall, these three
blogging websites combined for 80 million unique visitors, reaching more
than one in every four active online users in the US during October
2011.

And who are these bloggers and what else do they do online?
A study by NM Incite indicates that women make up the majority of
bloggers, and half of bloggers are aged 18 to 34.

Most bloggers
are well-educated: seven out of 10 bloggers have gone to college, a
majority of whom are graduates and about one in three bloggers are
mothers, and 52% are parents with children under 18 in their household.

Yang: Blogging with passion will eventually allow you to do it full time.

Besides
this, bloggers are active across social media: they’re twice as likely
to post/comment on consumer-generated video sites like YouTube, and
nearly three times more likely to post in message boards/forums within a
month.

According to Nuffnang, Asia-Pacific’s first blog
advertising community, bloggers generate income through ads placed on
blogs by various brands, and become part of a close-knit community
through a vast range of exclusive events and contests.

“In
Malaysia, blogging started growing exponentially in 2007 when Malaysians
started seeing its commercial viability,” said Nuffnang co-founder
Timothy Tiah.

Nuffnang has approximately 250,000 bloggers on its books and Tiah revealed that almost 50% of them are active.

“In
the US, some bloggers have successfully evolved into full-fledged media
companies that employ full-time writers and editors,” said Tiah who
believes blogs and traditional media can co-exist.

“Clients do not view blogs as an alternative to traditional media. We are benchmarked against Twitter and Facebook.

For example, having an editorial piece in the New York Times supersedes one by an online publication,” Tiah explained.

Local
blogging heroes such as Paul Tan and Vernon Chan, and Singaporean Dawn
Yang agree that blogging with passion will eventually enable one to do
it full time.

Chan said his site (vernonchan.com) was born out of the love for technology.

“I
enjoyed writing but in 2009, I decided to take it more seriously and
focused my writing on gadgets and tech-related news,” said the former
graphic designer.

“The blog now operates as a tech website with four writers on board.

“The tech scene is fragmented with plenty of players, but it’s healthy competition.

“I look up to sites like amanz.my and soyacincau.com as they were pioneers in this field,” he added.

Chan said that to remain competitive, a blogger needs to focus on speed, frequency and being current.

“Whenever
we attend an event, there’s live tweeting, live blogging, Facebook
updates and we ask questions that our readers pose to us,” said Chan.

He
walks around with a tablet, two smartphones, a laptop, a DSLR camera
and is always connected with his readers thanks to U Mobile broadband.

Tan echoed Chan comments and added that an honest blogger serves the reader and not the advertiser.

“We
have gotten ourselves in trouble with a particular company a few times
as they were not happy with some of the comments from the readers that
were published on the website.

“They stopped inviting us for test
drives and events for a while, but we serve our readers, and readership
is currency, ” said Tan, the founder of paultan.org, a leading motoring
website in Malaysia.

Tan also debunked the myth that people will read any content as long as its free online.

“Online readers are looking for something fast so it is important to be quick.

“We
do live updates and we have trained our readership,” said Tan, whose
company now owns popular Malay blog site, Ohbulan.com among others.

Tan did not mince his words when asked to comment about bloggers who only write advertorials.

“There
are bloggers who only attend events if they are paid and will only
write a blog posting if there’s a monetary exchange,” he said.

Across
the causeway, controversial fashion and lifestyle blogger Dawn Yang
(clapbangkiss.xanga.com/) was in Kuala Lumpur recently to attend an
event and the 27-year-old told MetroBiz that she started blogging to keep in touch with her friends.

“It
started by accident but in 2005, I won an online competition as
Singapore’s hottest blogger. That opened many doors for me,” said Yang
who was sent to Taiwan for a year to be an artist.

She also secured several endorsement deals from international brands to promote their brands on various platforms.

“Blogging has evolved over the years with Twitter, Instagram and Facebook. We can’t just operate on one platform,” said Yang.

Blogging
in Malaysia is seen as an easy way to make a quick buck, but to quote
blogging guru Alister Cameron: “As I have repeatedly written in one form
or other, blogging is not about writing posts. Heck, that’s the least
of your challenges. No, blogging is about cultivating beneficial
relationships with an ever-growing online readership, and that’s hard
work.”

Thursday, 27 December 2012

In digital space, users are increasingly being shaped as commodities by various sites and services.

LAST week, social photo-sharing application Instagram caused an uproar when it announced changes to its terms and conditions.

The
changes were related to its advertising policy, and were interpreted by
many people as the company reserving the right to share user
information and pictures with advertisers (or to be used in advertising)
without permission.

Instagram has since reversed that policy and
apologised for the “confusing” language, stating: “Legal documents are
easy to misinterpret.” (You can read its response at
http://bit.ly/U79Nld.)

This seems to have pacified some users,
but many are still fuming, while others have opted to try different
photo-sharing apps as an alternative.

There are two primary
issues with this. One is a privacy issue, in that the company would even
consider sharing user information and pictures with its parent company
Facebook and other third-party organisations (including advertisers).

The
other is copyright; in the same response, Instagram co-founder Kevin
Systrom wrote: “Instagram users own their content and Instagram does not
claim any ownership rights over your photos. Nothing about this has
changed.”

Users had every right to be upset. These are serious
issues with severe repercussions, and it is becoming more and more
common that online sites and applications are usurping the rights and
control of their users. Facebook’s constant changing of privacy settings
is legendary. The deeper we embed ourselves within such social network
sites, the more we seem to get walled in.

As the days wear on, we
find it increasingly harder to escape – most of our connections are in
our social network of choice, our memories are stored within our
profiles, and we are relying on it to be our source of information.

In
many cases, we have come to depend on it for almost all of our
interactions – we no longer need to remember people’s birthdays, we can
send messages to each other conveniently without the need to store
addresses, and we can broadcast our lives to all our friends at the
click of a mouse.

Whether or not the reliance on such technology
is a good thing is a different debate, but the fact is that the services
these sites provide – it doesn’t matter if we never needed them before –
are extremely useful.

However, many users don’t realise that
this is still a service. Such technology has become so embedded in our
lives that many of us have taken it for granted.

The fact that it
is also primarily operated on the Internet has contributed to this
sense of entitlement. Why buy newspapers when you get the news online
for free? How many of us still send text messages via SMS now that there
is iMessage, Blackberry Messenger and WhatsApp? With Skype and Viber,
who needs to make traditional phone calls?

In some cases, it is
easy to see how the companies behind them are making money. Newspapers
now provide news for free (some have paywalls) with the hope of driving
more traffic to their sites, which are plastered with advertising.

Apple
and RIM, the maker of the Blackberry, promote their messaging systems
to encourage people to buy their devices. Skype has a premium service
that users can pay for as well as cheaper computer-to-phone rates which
helps supplement its income. In that sense, the products these companies
offer are obvious.

Social network sites like Facebook, Instagram and Twitter also have a product: You and me.

What
they essentially do is no different from the media outlets – they sell
their user base to advertisers. Unlike the print and broadcast media,
however, these sites tend to have more information on their users which
can be sorted or mined to help advertisers reach their target market.

Each
update we post on these sites contains more information about our lives
and what interests us – whether it’s in the words we use, the places we
check in from or the photos we upload. And they have a lot of
information. Citing European policy law, a student from the University
of Vienna made a request to Facebook to hand over all the information it
had on him. And Facebook provided it – all 1,200 pages of it.

The
point here isn’t about how scary it is that a company has so much
information on each of us – this too is a different debate.

The
concern is that as technology advances, we are increasingly being shaped
to be a product, and this is an awareness we have to carry with us
constantly. It is pertinent to note that this is not a new phenomenon –
the whole basis of the advertising industry is based on consumers being
the product.

This is why newspapers are able to subsidise
publishing costs to sell their products at a relatively low price (or in
some cases, offer it for free) and why we get to watch television for
“free”. Or pay very little.

We need this awareness because it
will help us make decisions about how we navigate our digital lives. It
will also help us reclaim some of the control – and our rights.

Instagram
may have reversed that new policy for now, but there’s no saying it
won’t come back in another form. Facebook has gotten away for many years
with changes that its users do not like because few people are willing
to walk away from it.

This is not to suggest that what these
companies are doing is right. But the adage that nothing is free rings
true in this situation. There are alternatives but each comes with a
price.

The alternatives to these sites – some of which are on
open-source platforms – may not be as polished and lack the critical
mass to be as effective as the big social sites. Then there are the
commercial entities which charge you (Flickr, for example, is
capitalising on a sudden exodus from Instagram to its platform, offering
its paying customers an additional three months of service).

It
is only by carrying this awareness with us always that we can truly make
the right decision – whether to stick with these companies, or stick it
to them.

ReWired By Niki Cheong

Niki has just completed his MA Digital Culture and Society at King’s College London. Connect with him at http://blog.nikicheong.com or
on Twitter via @nikicheong. Suggest topics and issues on digital
culture, or pose questions, via email or on Twitter using the
#Star2reWired hashtag.

< Hapless situation: Lee relating Chan and Yong’s story during the press conference.

IPOH: Chan Kwai Woh and Yong Yin Yoke, both in their 70s, have been moving from one budget hotel to another since Dec 17.

The
elderly couple is trying to avoid being hounded and threatened by loan
sharks from whom their 48-year-old son Voon Jiun had borrowed huge sums
of money.

“I want to cut ties with my son for causing us so much
trouble, and I request the loan sharks to find him instead of harassing
us,” said Chan.

The 73-year-old part-time technician said their home in Taman Cempaka here was splashed with red paint on Dec 15 and Dec 23.

“We
lodged a police report after the first incident and moved out without
taking much clothes or even our high-blood pressure medicine,” he told a
press conference at the office of Perak MCA Public Services and
Complaints Bureau chief Datuk Lee Kon Yin here yesterday.

“After
the first incident of paint being splashed in our porch we questioned
our son about the matter and the next day he disappeared.”

Missing borrower: Voon Jiun has gone into hiding.

Chan
and Yong, 70, have four other children but are afraid to stay with them
as the loan sharks might also harass their families.

“It is stressful dealing with the loan sharks and we decided it was best to stay outside,” said Chan.

He believes Voon Jiun had fled after borrowing money from the loan sharks. His whereabouts are not known.

Showing photographs of his son, Chan said their relationship had been strained for some time.

“He had been staying for over 20 years in Australia, where he got married and has a 10-year-old daughter.“However,
he returned to Malaysia alone in June,” said Chan, adding that the
family does not know what the son does for a living.

Meanwhile, Lee said he would write to the police to speed up the investigation on Chan’s report.

“I will follow them back to their house so that they can take their medication and other items.

“But
I have advised them to stay put in their house. If there is any problem
they can always contact the police, instead of staying in budget
hotels,” he added.

Wednesday, 26 December 2012

The magnitude of the banking scam must be realised and tough action taken

The UBS building in Zurich. Photograph: Michael Buholzer/Reuters

This is the year the consensus changed. Around the world,
policy-makers, regulators and bankers recognised that the legacy of the
20-year credit boom up to 2008 is more corrosive than all but a few
realised at the time. The bankers – and the theorists who justified
their actions – made a millennial mistake. Navigating a way out of the
mess was never likely to be easy, but it is made harder still by not
recognising the magnitude of the disaster and the necessary radicalism
involved if things are to be put right.

If there were any last doubts they were dispelled by the record $1.5bn fine paid by the Swiss bank UBS for "pervasive" and "epic" efforts to manipulate the benchmark rate of interest – Libor
– at which the world's great banks lend to each other. The manipulation
was at the behest of the traders who buy and sell "interest rate
derivatives", whose price varies with Libor, so that cumulatively
billions of pounds of profits could be made. Nor was UBS
alone. What is now evident is that all the banks that made the daily
market in global interest rates in 10 major currencies were doing the
same to varying degrees.

There was a complete disdain for the
banks' customers, for the notion of custodianship of other people's
money, that was industry wide. It is hard to believe this culture has
evaporated with the imposition of a fine. No banker falsifying the
actual interest rates at which he or she was borrowing or lending, or
trader who requested that they did so, had any sense that there is
something sacred about banking – that the many billions flowing through
their hands are not their own. It was just anonymous Monopoly money that
gave them the opportunity to become very rich. The UBS emails, which
will be used to support criminal charges, could hardly be more
revealing. This was about making money from money for vast personal
gain.

Interest rate derivatives are presented as highly useful if
complex financial instruments – essentially bets on future interest rate
movements – that allow the banks' customers better to manage the risks
of unexpected movements in interest rates. Whether a multinational or a
large pension fund, you can buy or sell a derivative so you will not be
embarrassed if suddenly interest rates jump or fall. Bookmakers lay off
bets. Interest rate derivatives allow buyers to lay off the risk that
their expectations of interest rate movements might be wrong.

What
makes your head reel is the size of this global market. World GDP is
around $70tn. The market in interest rate derivatives is worth $310tn.
The idea that this has grown to such a scale because of the demands of
the real economy better to manage risk is absurd. And on top it has a
curious feature. None of the banks that constitute the market ever loses
money. All their divisions that trade interest rate derivatives on
their own account report huge profits running into billions. Where does
that profit come from?

The answer is it comes largely from you and
me. Global banking, intertwined with the global financial services and
asset-management industry, has emerged as a tax on the world economy,
generating much activity and lending that has not been needed, but whose
purpose is to make those who work in it very rich. The centre-left
thinktank IPPR reports that
people with identical skills earn on average 20% more in financial
services than in other industries, with the premium rising the higher
the seniority. That wage premium does not come from virtuous hard work
or enterprise. It comes from how finance is structured to deliver
excessive profit.

Scandalous

The Libor scam is an object lesson in how
finance taxes the rest of the economy. Plainly, the final buyers of the
mispriced interest rate derivatives could not have been other banks,
otherwise they would have lost money and we know that they all made
profits. In any case, they were part of the scam. The final buyers of
the mispriced derivatives were their customers. Some must have been
large companies, but many were those – ranging from insurance companies
and pension funds to hedge funds – who manage our savings on our behalf.

Here
a second scam kicks in. One of the puzzles of modern finance is why the
returns to those who buy shares in public stock markets are so much
lower than the profits made by the companies themselves. One of the
answers is that there are so many brokers, asset managers and
intermediaries along the way all taking a cut. Sometimes it is through
excessive management fees, but another way is not doing honest to God
investing – choosing a good company to invest in and sticking with it –
but through churning people's portfolios or unnecessarily buying
interest rate derivatives to protect against interest rate risk, while
charging a fee for the "service". Many of those mispriced interest rate
derivatives will have ended up in the investment portfolios of large
insurance companies and pension funds or, more sinisterly, in the
portfolios of the banks' clients.

Most rotten

Bank managements
are presented as ignorant dolts, fooled by rogue traders. They were no
such thing. The interest rate derivative market is many times the scale
than is warranted by genuine demand precisely because it represented
such an effective way of looting the rest of us. The business model of
modern finance – banks trading on their own account in rigged derivative
markets, skimming investment funds and manipulating interbank lending,
all to underlend to innovative enterprise while overlending on a
stunning scale to private equity and property – is not the result of a
mistake. It represents a series of choices made over 30 years in which
finance has progressively resisted any sense it has a duty of
custodianship to its clients or wider responsibilities to the economy.
It was capitalism allegedly at its purest. We now understand it was
capitalism at its most rotten. It needs wholesale reform.

The
government's proposals to ringfence investment banking from the rest of a
bank's activities, following the proposals from Sir John Vickers, is a
start. But it is only that. Last week, Conservative MP Andrew Tyrie's
cross-party parliamentary commission proposed " electrifying" the ringfence with
the threat of full separation if malpractice continues. It also
considered banning banks from trading in derivatives on their own
account. But while tough, the commission should extend its brief. The
issue is to create a financial system in its entirety that serves
individuals and business alike, makes normal profits and, above all,
embeds its public duty of custodianship in the bedrock of what it does.
The government fears that more upheaval will unsettle banking and
business confidence. It could not be more wrong. Reform is the platform
on which a genuine economic recovery will be built.

Tuesday, 25 December 2012

I REFER to the report in “Maids may snub Malaysia” (The Star, Dec 24, reproduced below).

People
may wring their hands in despair now but bear in mind a litany of abuse
cases and the fact that Malaysian workplace laws regarding maids have
been dragged into the 21st century with better wages and conditions is
too late.

People have justified for too long the treating of
maids as second-class humans by claiming all sorts of benefits that they
bring to these women.

In the report, it states “If maids chose
not to come here, many women would either have to give up their careers
or demand for more childcare centres”.

My sister in Australia has
for the last 20 years worked in a full-time job, undertaken part-time
university studies, raised three children, seen to my ageing father and
ran a house.

All this she has done without a maid, housekeeper or cleaner.

She has not given up her career.

What
she has gained from this are children who are emotionally intelligent,
responsible, able to undertake tasks such as simple cooking, cleaning
their bedrooms, washing the car, walking the dog and discovering that
being part of family is learning to be responsible.

I know of countless Malaysian families in the same boat as my sister. The world will not end if maids don’t come.

GORDON REID Kuala Lumpur

Maids may snub Malaysia

By PATRICK LEE patrick.lee@thestar.com.my

PETALING JAYA: Malaysia may soon be the last choice of foreign domestic maids.

With
other countries paying higher wages and the current low exchange rate
of the ringgit, domestic maids may prefer to go elsewhere, warn
economists.

RAM Holdings
group chief economist Yeah Kim Leng said that although there would be a
greater demand for maids, especially with an ageing population, it
would be harder to hire them.

“Unless our income is able to keep up with the rising costs, fewer people will be able to afford maids,” he said.

He said that with improving economies in countries like Indonesia, Malaysia may no longer be viewed as a potential job market.

Yeah said more locals might have to work as maids and predicted a greater demand for outsourcing of domestic chores and daycare.

“The Government will have to look into an alternative for working parents,” he said.

There
has been a trickle of Indonesian maids into the country despite the
signing of an MoU between Malaysia and Indonesia on May 30 last year
which set a RM4,511 agency fee for the hiring of maids.

The
Malaysian Maid Employers Association (Mama) has since claimed that the
cost structure was not sustainable as agents were reluctant to bring
Indonesian maids into the country, leading to a shortage.

MIDF
research chief economist Anthony Dass said locals would have to choose
between paying more for their maids or not having any at all.

“If another country offers better (fees) for maids and agencies, why should they come here?” he said.

Dass said increased wages for maids would reduce Malaysians' disposable incomes, especially if salaries do not go up.

He
said if maids chose not to come here, many women would either have to
give up their careers or demand for more childcare centres.

Monday, 24 December 2012

There is growing optimism among investors despite possibility of overall contraction

Multi-sector economy:
Malaysia’s economic performance has been strong, and it is often
recognised as among the emerging economies that will have a prominent
role on the world stage in the coming years.

KUALA LUMPUR: The new year is just around the corner. In many ways, it will be
a relief to say farewell to 2012, a year which has seen the advanced
countries struggling amid seemingly unending economic and financial
uncertainty.

Naturally, the tail-end of the year is a time to
look ahead with hope and expectation. And indeed, there is growing
optimism among investors about the global economy. However, is this
realistic when some experts refuse to rule out the possibility of an
overall contraction?

When presenting its Economic Outlook in
late November, the Organisation for Economic Cooperation and
Development (OECD) warned that the global economy was expected to make
“a hesitant and uneven recovery” over the coming two years.

OECD secretary-general Angel Gurra
pointed out that we were not yet out of the woods. “The near-term
outlook is not only weak, but also downside risks predominate. The
lingering euro-area crisis remains a serious threat to the world
economy. At the same time, if left unresolved, the US fiscal cliff'
could tip the US economy into recession and weigh on global growth,” he
added.

The eurozone is expected to see a 0.4% contraction this
year and a further 0.1% fall in 2013. Even if the White House and
congressional leaders can hammer out a short-term agreement on the
budget that will avoid the fiscal cliff, growth in the United States is
forecast to grow at 2% next year, down from the 2.6% forecasted in May.

With
the United States and Europe battling to revive their economies, the
OECD believes the world economy will grow by 3.4% in 2013, up from 2.9%
this year.

This will likely be supported by the economic
expansion of the likes of China, Brazil and India, although they too
will be impacted by challenges faced in the West.

< Gurria: ‘The near-term global outlook is not only weak, but also downside risks predominate

Malaysia
too will contribute to this forward momentum. Its economic performance
has been strong, and it is often recognised as among the emerging
economies that will have a prominent role on the world stage in the
coming years.

The recent Country Brand Index (CBI) 2012-13, for
example, ranks Malaysia as third among the Future 15 tomorrow's leading
country brands that have “great potential across a variety of areas”.

Constructed
annually by global brand consultancy FutureBrand, the CBI measures and
ranks global perceptions around the world's nations based on elements
such as their cultures, industries, economic vitality and public policy
initiatives.

Economic reforms

This year is the
first time that the index report incorporate the Future 15, which
reflects six future drivers: governance, investment, human capital,
growth, sustainability and influence.

Published last October, the CBI 2012-13 report notes: “Malaysia's workforce, tourism and vast resources may just be the secret to its success.”

That,
of course, is not the full picture. A key component of the Malaysian
success story has been the sound implementation of economic reforms
since the nation's independence that has transformed an exporter of raw
materials into an emerging, multi-sector economy driven by exports and
supported by a well-developed regulatory system.

Manokaran says the economy is still driven by domestic demand, led by private consumption
Forward-looking
planning has enabled the Government to capitalise on the country's
unique offering, including a rich heritage and scenic landscapes, to
support a thriving tourism sector. Home to more than 15% of the world's
species, Malaysia is one of the world's most bio-diverse areas.

Also
crucial are a focus on building on the country's vast natural
resources, a commitment to economic openness, and a concerted effort to
drive investments in infrastructure and research and development. These
are complemented by the encouragement of innovation in business and
amongst the workforce, and the development of regional alliances.

Malaysia's
economy has been resilient amid the challenging global economic
conditions, with real gross domestic (GDP) product growth estimated at
5.1% this year and 5% in 2013, according to the World Bank.

Its
third-quarter performance surprised on the upside with GDP expansion
beating economists' median expectations of 4.8%; year-on-year growth in
the quarter was 5.2%, with domestic demand fuelling economic activity
and compensating for the slower export demand from major trading
partners affected by the ongoing economic woes.

Domestic demand
in the third quarter continued to experience double-digit growth,
increasing 11.4% from a year ago. The impetus for this was supplied by
strong public and private sector investment.

Private investments
were primarily driven by capital spending in the services sector,
particularly in transportation, real estate and utilities, while public
investments were mainly capital spending by public enterprises in
transportation, oil and gas, education and utilities.

< Zeti warns of some uncertainties in the export sectorEndless possibilities

Commenting
on Malaysia's third-quarter performance, Alliance Research chief
economist Manokaran Mottain said the economy was still driven by
domestic demand, led by private consumption and investment activities,
which reflected the Government's drive to stimulate income growth,
improve and develop infrastructure, and ensure a steady flow of foreign
capital.

However, Bank Negaragovernor Tan Sri Dr Zeti Akhtar Aziz
cautioned that although GDP growth in the fourth quarter was likely to
continue that of the third quarter, there were some uncertainties in the
export sector. The central bank estimates that growth for the whole of
2012 will be at least 5%.

The experts are cautiously confident about Malaysia maintaining its economic performance in 2013. The recent Malaysia Economic Monitor,
a report by the World Bank, said Malaysia's growth would likely weather
a weak global environment and would grow robustly in 2013.

Public
and private investments are expected to remain strong and lend support
to economic growth in the new year. Private investment is forecasted to
grow at 13.3% in 2013, up from 11.7% in 2012, driven by the rollout of
the ETP. Public investment is forecasted to expand by 4.2% in 2013, as a
result of higher capital outlays by non-financial public enterprises
and development expenditure by the Federal Government .

The
Finance Ministry has said the prospects for the services sector are
expected to remain upbeat with the accelerated implementation of key
initiatives under the National Key Results Area and continued investment
in the seven services sub-sectors under the National Key Economic Areas.

These
initiatives are geared towards driving the wholesale and retail trade,
finance and insurance, and communication sub-sectors, which are
forecasted to grow 6.8%, 5.2% and 8.2% in 2013.

Though the United
States and Europe have some way to go before they can again enjoy
pre-crisis growth rates, Malaysia looks set to stay on its stable
trajectory of growth, benefiting from wise economic planning and a
steady pace of growth.

A bright future lies ahead for Malaysia, a
nation earmarked to become a force that will reshape the global
landscape of tomorrow. As the country plays an increasingly important
role, it will no doubt offer Malaysians and the world a destination for
growth and endless possibilities.

Sunday, 23 December 2012

Singapore's decade-long push to become a hotbed for entrepreneurs is stuck at stage one.

The city-state of 5.3 million people ranks No. 1 in the
world in ease of doing business and fourth in starting one,
according to a World Bank study. It offers low taxes,
easy-to-obtain seed money to start a business, and a
well-educated, English-speaking workforce in the gateway to
Asia.

It just takes one day and S$315 ($260) to register a
business in Singapore. Yet, the country has struggled to attract
international investment money for its own start-ups.

Venture capital firms are put off by the small size of the
market, lack of big ideas that can be a global success and an
uncertain exit strategy. Only 50 out of 301 venture capital
firms based in Singapore are interested in local investment,
according to the Asian Venture Capital Journal Research.

Of the 70 high tech start-ups the government has invested in
over the past two years, just 10 received follow-on private
funding from investors locally and abroad, according to the
National Research Foundation, the government arm responsible for
research and development.

"There is a real shortage of venture capital firms investing
in Series A in Singapore," said Leslie Loh, an
entrepreneur-turned-investor, referring to the first round of
funds raised by start-ups after seed capital.

"VCs are looking at countries like India and China where there is a larger domestic market."

Only
2 percent (about $15 million) of the total venture capital investment
in Asia is aimed at Singapore, according to Asian Venture Capital
Journal Research's data for 2012. Japan,

China and India topped the list of big VC investments in Asia.

"In the early stage there is a big push (by the government).
But if you look at the whole ecosystem for helping companies
grow, there is a gap in the growth stage," said Wong Poh Kam, a
professor at National University of Singapore's business school.

"For a Singapore company to be able to achieve global
success, it needs to have sufficient follow-on venture capital
funding."

CHICKEN-AND-EGG PROBLEM

Pampered by government funds at the early stage, when
start-ups can tap up to S$500,000 in grants, companies are
finding it hard when they go looking for millions of dollars
from venture capital firms for Series A funds.

Of the 374 venture capital investments in Asia in 2012,
Singapore accounted for just 24, according to AVCJ Research.

"If there are no success stories, VCs do not think there is
a compelling reason to be here," said Wong.

But that success depends on big money from venture capital
firms, leaving start-ups stuck in a vicious cycle.

Andrew Roth, co-founder of Perx, which makes a digital
loyalty card application, said one of the first questions he
heard from investors when he went looking for funding was, "What
is your net operating income?"

Roth says he would not have been asked that question if he
was in Silicon Valley, where investors care more about the
functioning of the product and its ability to gain scale.

"The mindset has to change," said Roth, who is currently in
the process of raising a second round of funds from individual
investors and funds. "It is a younger ecosystem so investors are
so much more risk averse."

THE 'A' CRUNCH

Singapore start-ups are also forced to think globally right
from day one as a product aimed at a small domestic audience is
not going to bring them a lot of success.

Henn Tan, head of Trek 2000 International Ltd, the
company that introduced the ThumbDrive USB flash drive in 2000
and ranks among the few globally known success stories of
Singapore, said it is difficult for Singapore to produce
entrepreneurs.

"Because fellow Singaporeans are being subjected to
regimented life from early years...there are too many rules and
regulations for the young generation to think out of the box
without being reprimanded," Tan said.

The problem of raising funds beyond the government-created
cocoon raises the question of whether its involvement in the
start-up scene is actually a good thing.

Some think the government initiatives allow undeserving
start-ups to get easy money, while others say the lack of
private funds just proves that the government has to be active
in providing a catalyst to start-ups and entrepreneurs.

The government says it needs to support start-ups at the
early stage because that's where the most risk exists.

"When the landscape is one which sees the vibrancy that you
see in California and where multitudes of VCs have taken root
and (are) able to manage a portfolio from early stage to growth
stage to pre-IPO, then we can take a step back," said Low Teck
Seng, CEO of the National Research Foundation.

But he also warned against too much government involvement.
"If the government funds what the industry thinks is not worth
funding, then we will not be doing justice to public funds."

IDEAL ENVIRONMENT

Other than state-run or state-backed companies such as
Singapore Airlines Ltd and Keppel Corp Ltd,
the world's largest oil rig builder, there are only a few big
home-grown companies from Singapore.

There was Creative Technologies Ltd, whose PC audio cards, speakers and MP3 players
were a hit in the early 2000s, but it fell out of favour with
increasing competition. The company has posted 21 straight quarters of
losses and voluntarily delisted itself from the Nasdaq in 2007.

For Perx's Roth, who moved from New Jersey to Singapore to
start his company, the attraction is the presence of global
firms that set up an Asian base here, providing a steady stream
of potential customers.

The fact that Singapore is home to high-flying business
executives also helps. Facebook co-founder Eduardo Saverin
invested in Perx early on. He sits on Perx's board, and meets
with Roth and his team once a month, Roth said.

"It's hard for Singapore to claim to be an entrepreneur hub
for (the) whole of Asia," said NUS's Wong. "A more realistic
target would be for Southeast Asia."
($1 = 1.2182 Singapore dollars)

Saturday, 22 December 2012

IT is understandable for the Strata Management Act to attract much
public interest. There are (or will soon be) more people living in
high-rise strata properties than in landed properties, given the rapid
urbanisation and rising land prices in Malaysia.

The issue of
the Board of Valuers, Appraisers and Estate Agents (BVAEA) seeking to
regulate property management is controversial. Since the BVAEA is a body
under the Finance Ministry, isn’t it odd that the Finance Ministry
rather than the Housing Ministry is trying to regulate property
management?

Most people have a pretty good idea about the job of a property manager and would conclude that it is a generalist’s job.

There
should not be too many restrictions attached to a generalist’s job,
such as that of a sales manager or a supermarket manager.

The opinion of HBA honorary secretary-general Chang Kim Loong on the role of a property manager is a bit overstated.

Property managers are at all times employees of MCs and JMBs and never the other way round.

Lives and property worth millions of ringgit are the prime responsibilities of employers and not the employees.

It
is an exaggeration to say that lives and property worth millions are
being entrusted to property managers to care, control and manage.

However,
it may be a good idea to regulate the property manager’s job, but it
would be more appropriate if it came under a board in the Housing
Ministry with input from engineers and architects.

It would be
less appropriate to come under a board in the Finance Ministry, as
property management has more to do with building than finance.

By A CONCERNED CITIZENKuala Lumpur

Forum on strata management

A SEMINAR on the Strata Management Bill 2012 as well as the Strata
Titles (Amendment) Act 2012 will be held at Auditorium C and F, Level 5,
Komtar, from 10am to 4pm on Jan 13.

Komtar assemblyman Ng Wei
Aik said many people were unaware of the new bill’s contents, including
how to handle strata management disputes.

“The bill provides
better protection for property owners. It is important that they know
their rights,” he said at a press conference.

He said lawyer Lee
Khai would talk on the application of the Strata Management Bill while
licensed land surveyor Chuang Kuang Han would talk on Strata Titles
Application and Problematic Cases.

Registration fee is RM30 per person which includes buffet lunch and lecture notes.

The public, including management corporations, joint management bodies and residents associations are invited to attend.

For
more details, contact Ng’s service centre at
04-2270215/017-4108914/012-4290163, fax 04-2278215 or e-mail
dapkomtar308@gmail.com before Jan 8.